Electric Rate Increase Passes Despite Voter Opposition
Despite more than 600 petitions gathered and submitted to Glendale city council by Glendale Coalition for Better Government, Council members Friedman, Najarian and Weaver voted for a rate increase that will burden Glendale rate payers for the next 5 years with an increase of almost 32%.
Glendale Coalition for Better Government immediately mobilized its efforts and members and within 1 weeks period it was able to setup a website to sign a petition opposing the rate increase at change.org you can follow a link to the petition here. Successfully we were able to gather more than 330 petition signatures online. You can continue to sign the petition and make sure that you include your email so that we may continue to update you in any upcoming Glendale issues. Additionally petition signatures were also gathered in person by our members to the tune of 290 in person signed petition.
In a final effort to argue against a rate increase, the letter bellow was prepared and delivered to council member Najarian arguing against a rate increase. Glendale coalition for Better Government will continue to engage Council on future issues and will continue to explore alternatives to reach our objective of having important issues addressed in an open and honest dialogue between the City Council and the city’s informed and concerned citizens.
Honorable Councilman Najarian
On behalf of the citizens of Glendale I wish to express our concern with regards to the upcoming Electric rate increase currently proposed at the rate of 8,7,5,2,2. The analysis presented by staff is based on an annual review regarding the cash reserve needs of the utility that was last conducted on 8/29/2006. Council established the cash reserve on 7/23/2003 but annual reviews were only conducted up until 2006.
Given the fiscal prudence that you strive to demonstrate, I urge you to consider the prudence of voting on such a high rate increase based on data that has not been reviewed for the last 7 years. Given the burden many of your constituents will have to bear, I believe you will acknowledge that this burden should be based on current data.
A modest increase of 3,3,3 would provide the utility the immediate cash infusion it needs and the time to better assess its long term cash reserve policy that is now seven years old.
Furthermore, Regulatory Adjustment Charges (RAC) will automatically pass regulatory costs through to the ratepayers without any council supervision or decision. The Revenue Decoupling Charge (RDC) will do the same when actual revenues do not meet expected revenues, again excluding council supervision or decision. I urge you to place caps similar to the Energy Cost Adjustment Charges (ECAC) or counsel supervision of these increase in charges.
Part of the rationale for increased rates is the financial burdens placed on the utility due to increasing and burdensome regulations as well as the diminishing revenues due to decrease of electric usage. Since the RAC and RDC address these two concerns and automatically adjust rates to compensate for them, there may not be a need for such a sizable rate increase.
It should be noted that the RCD automatically credits or surcharges the ratepayer based on expected revenues. As ratepayers use less electricity than exepcted, they are surcharged for less than expected revenue. Given that increased rates will likely result in conservation and dereased revenue, rate payer conservation efforts could potentialy be rewarded by automatic rate increases. This could lead to the same public outcry which occurred when the city promoted water conservation only to require increase in water rates because of reduced revenues due to the conservation.
Finally, It may be prudent to approve a modest increase now and take into consideration the full potential of future revenue. The development of down-town Glendale may be stymied should developers find it difficult to lease residential and commercial unites due to high utility cost.